As for America, we’ve thrived in recent decades with a credit-consumption-led economy, whereby we maintained a middle class by using more steroids (easy credit, subprime mortgages and construction work) and less muscle-building (education, skill-building and innovation). It’s put us in a deep hole, and the only way to dig out now is a new, hybrid politics that mixes spending cuts, tax increases, tax reform and investments in infrastructure, education, research and production. But that mix is not the agenda of either party. Either our two parties find a way to collaborate in the center around this new hybrid politics, or a third party is going to emerge — or we’re stuck and the pain will just get worse.
Two quick points: First, we're not in a deep hole because we live in a post-industrial society. We're in a deep hole because of a massive recession combined with a decade of tax cuts, wars, and un-financed expansions of Medicare. Spending increases plus declining revenues equals big hole. It's really not rocket science.
Second, yeah, it's too bad that we can't get one of our parties to champion an agenda of spending cuts, tax increases, and investment in infrastructure and education. Oh, wait, that's exactly what the Democrats have been pushing. But yeah, hybrids, the kids all love the hybrids.
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